On Monday (January 31), former Goldman Sachs executive Raoul Pal explained why he currently holds very little Bitcoin even though back in October 2020 he was so bullish that he claimed “Bitcoin is eating the world.”

Prior to founding macro economic and investment strategy research service Global Macro Investor (GMI) in 2005, Pal co-managed the GLG Global Macro Fund in London for global asset management firm GLG Partners (which is now called “Man GLG”). Before that, Pal worked at Goldman Sachs, where he co-managed the European hedge fund sales business in Equities and Equity Derivatives. Currently, he is the CEO of finance and business video channel Real Vision, which he co-founded in 2014.

In the April 2020 issue of the GMI newsletter, Pal explained why he believes that Bitcoin, which he called “the future”, could one day have a $10 trillion valuation. In that issue, Pal said that the idea of a $10 trillion valuation for Bitcoin is not so crazy:

After all, it isn’t just a currency or even a store of value. It is an entire trusted, verified, secure financial and accounting system of digital value that can never be created outside of the cryptographic algorithm… It is nothing short of the future of our entire medium of exchange system, and of money itself and the platform on which it operates.

Then, on 7 October 2020, during an interview with Daniela Cambone, Editor-at-Large and Anchor at Stansberry Research, Pal said that said that Bitcoin has a 50% allocation in his personal investment portfolio and that he is considering selling his gold to buy more Bitcoin:

That’s has been an ongoing narrative. I’ve been involved in Bitcoin since 2012. It’s been an ongoing narrative that at the beginning of this I knew the only answer would be cut all interest rates to zero and probably negative and then massive stimulus beyond anything which we’ve ever seen before.

So the first phase I want to be involved in is Bitcoin. So, I bought into the sell-off, added to my positions, and now I’m starting to see the ship towards insolvencies and the only answer is more from the central banks.

That’s why I started to buy more and more Bitcoin. Technically, the setup’s right. Obviously, we had the halving, and just the adoption phase — what’s happening with the institutions — it’s like the perfect timing…

It’s probably above 50% now. Really, I’ve reduced cash, put that into Bitcoin. My trading positions are relatively small because I don’t think there’s as much opportunity as in Bitcoin. So, really, mainly a bit of cash, some gold, and Bitcoin, and I’m even toying with the idea of selling my gold to buy Bitcoin more Bitcoin.

In a tweetstorm sent out on 27 October 2020, Pal described Bitcoin as “a supermassive black hole that is sucking in everything around it and destroying it.” He then proceeded to explain what he means. He did so using charts that compared the performance of Bitcoin — during the past three-year period — to gold, the Nasdaq, banking stocks, bonds, commodities, G4 central bank balance sheet, silver, Amazon stock (AMZN), and apple stock (AAPL).

Pal concluded by saying that Bitcoin is the best investment/trade opportunity he has ever come across:

Then, on 29 November 2020, tweeted that he was able to sell all his gold and “to scale in to buy BTC and ETH (80/20).”

In April 2021, he talked more about Ethereum and how it has outperformed Bitcoin.

In July 2021, Pal had an interview with Camila Russo, the host of “The Defiant” podcast; this episode was released on July 19 July 2021.

Pal mentioned that he remained bullish on both stocks and crypto. Nevertheless, he told Russo that that he had invested 100% of his liquid net worth in crypto because he believes that this asset class offered the greatest upside potential.

Here were the two most interesting things we found out during that interview:

  • He had “added a basket of other tokens”, focusing on social tokens that use non-fungible tokens (NFTs) “outside of just artwork.”
  • As of July 2021, his crypto portfolio was 55% in $ETH, 25% in $BTC, and 20% in other cryptoassets.

On 29 October 2021, Pal, who had said that he was currently “irresponsibly long” on $ETH (with around 85% of his personal investment portfolio in $ETH), had an interview with Ash Bennington, Senior Editor for Real Vision, during which he explained that one of the major reasons for his bullishness on $ETH is the scarcity of its supply relative to demand.

According to a report by The Daily Hodl, Pal had this to say about Ethereum’s free float:

[Ethereum] has a restricted supply because of the burning of ETH from the gas fees. Everybody’s staking their tokens for ETH 2.0, so you’ve taken loads off the exchange. Then there… [is] about $100 billion locked up in DeFi (decentralized finance), NFTs (non-fungible tokens) and all of that. That actually leaves a free float of Ethereum of about 11%.

11% is all the available Ethereum that you could buy if you went into the marketplace, and we’ve got that demand shock going on in front of our eyes. Bitcoin has nothing like that going on. Yes, there is a supply shock, yes, there’s a bit of a demand shock, but it just doesn’t have the network intensity that Ethereum does.

On 19 January 2022, after getting into an argument with a Bitcoin maximalist on Twitter, he shocked and angered quite a few people in the crypto community by claiming that he only owned one bitcoin.

Well, yesterday, Pal acknowledged the anger over disclosing that he has a tiny exposure to Bitcoin and explained that the reason for being so “underweight” in $BTC was that he expected it to underperform compared to $ETH and some other cryptoassets.

Then, after Bitcoin maximalist podcaster Peter McCormack asked Pal if he really owned just one bitcoin, Pal replied that he believed that at most he held two or three bitcoins.


The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.


Featured Image by “vjkombajn” via Pixabay